Google's relationship with Madison Avenue has been a tenuous one, but with a bit of outreach and a few olive branches, the search giant has managed to cozy up to major agencies and brand marketers.
But the company's massive deal with Heineken, one of the 100 largest digital advertisers, is raising new questions about Google's position in the market.
The deal was originally reported on by the Financial Times, and as AdAge explains:
[The deal] covers at least 20 countries and calls for the brewer to advertise on Google platforms, including YouTube, in return for consulting services, including audience targeting and joint research projects.
Both companies will bring "together their marketing professionals to exchange ideas and share knowledge," Heineken said in a statement. The two companies will also work together to create mobile campaigns in emerging markets.
AdAge's EJ Schultz observes, "it sounds a bit like what digital agencies do." That it sure does, but should agencies start worrying about Google cutting them out?
None of the digital agencies Heineken works with have been displaced by the brewer's relationship with Google, and Tom Bedecarre, the CEO of AKQA, Heineken's global digital agency, told AdAge that he's not only "strongly in favor of clients having a better and stronger relationship with companies like Google, Facebook and Twitter", but that he helps facilitate those relationships.
Google, likely concerned about creating undesirable tensions in agencyville, is going out of its way to reassure agencies that there's still a place for them. "All of the implementation [for the Heineken deal] is happening through agencies," Google's Henrique de Castro told AdAge. In other words, agencies are safe.
But that doesn't mean that agencies shouldn't be at least a little concerned. Even if Heineken's Google deal is closer in nature to an upfront buy than it is to an agency relationship, agencies need to understand what Heineken is getting in return.
A comment by Tara Carraro, a Heineken spokesperson, is revealing:
The agreement with Google is to use their know-how on analytics in measuring effectiveness on consumer insights.
Although it's somewhat unclear what this means, Carraro seems to be implying that Heineken believes Google is more capable of handling the measurement of its digital campaigns than its digital agencies are.
So even if those digital agencies aren't being dismissed today, they might want to consider the strategic importance of going beyond the creative if they're going to stay competitive in the digital space in the coming years.
Reader comments (13)
4:30PM on 1st July 2011
Google has always been an agency, they have account managers which means they operate agency type services.
This deal doesn't surprise me & Google will gain much more then heineken will. I do believe companies need to make Google work much harder for ad revenue which heineken are clearly trying to do.
This may open up the market for more demanding account management from Google though which is good, as currently they lack something
11:42PM on 1st July 2011
I agree Google can do a better job analyzing data than most agencies. They have the network in place and are continually adding to it with more display, offers, and now Google+.
12:04PM on 2nd July 2011
I would be interested to find out what the other brewers think about this. Surely there's a conflict when they place their spend with google too if they're not getting the same deal.
8:52PM on 2nd July 2011
Google's big enough to not care about what others think... They are going to keep doing what they want to do, and leave others arguing about what is best.
6:55AM on 4th July 2011
Interesting. The ammount of data available to Google is scary - i'd love to see what the proposed media plan looks like for Heineken.
Don't be evil.
Editor at TheMediaBriefing
8:09AM on 4th July 2011
Using the term age to describe what Google does is ineffective: you're using pre-internet terminology to define an internet company.
CEO at RedEye
8:23AM on 4th July 2011
This is no different to how things have worked for many years, more complex media owners, such as data companies, work directly with advertisers because, as you would expect, they understand their media the best.
9:25AM on 4th July 2011
I agree with Mark Patron; this deal is a tried and tested formula and has been for decades. It's just more complex with the addition of data, analysts, new channels etc.
12:36PM on 4th July 2011
There isn't anything new here, Google is just getting more worldly... There are billions of advertising dollars at stake worldwide, and they have landed a very nice account... The part that excite's me the most is, Heineken chose an American company... Google's reach is global, and they will take care of business... "Everyone have a great day !"
SEO Director at Guava UK
3:22PM on 4th July 2011
Quite a turn around for a company that didn't allow beer ads until 2008 http://selnd.com/mR0fbg
Media Portfolio Lead at Personal
9:51PM on 4th July 2011
Direct deals, or exclusive deals have been seen across all media channels for a long time, and there is still a significant role for an agency in this process to facilitate, project manage, implement and evaluate activity.
Google is still by most definitions a media owner, and as such their motivations will always be very different to that of an agency. This means there will always be benefits for a third or even more agency parties to be involved and ensure a more collaborative process.
It is interesting that an advertiser feels that they can get access to greater levels of analysis and data by doing a deal direct rather than relying on their agency, however I feel there are two main motivating factors to this. One, Google has a lot more data than most agencies can ever hope to have (and isn't keen on sharing it in most instances, making it covetable). Two, Google has much more to gain financially by providing the analysis of this data and the advertiser's subsequent activity for free to return for a significant spend commitment by that advertiser.
Digital Strategy Manager at Sage UK
12:22PM on 5th July 2011
Mark hits the nail on the head. Big spending clients have always liked a direct relationship with their largest media owners.
However the day to day management of campaigns is not something most clients are set up to handle. We use agencies for a number of reasons.
I value my agencies insight and analysis of the data and trust them to be impartial - I'm not sure I could trust Google in the same way.
Pete
Principal at YWM Consulting
1:54PM on 7th July 2011
+1 for Mark. Yes, direct deals with media owners are old hat.
But the gauntlet has been thrown: it is now for agencies (or anyone else seeking to add value) to prove they can do more than just be the pallbearers for "execution". If an agency had come up with this smart idea, I doubt Google would have said, "Sorry, we prefer to go directly to Heineken".
Something that's neglected in analysis of these types is the clients themselves. The ever-increasing presence of procurement or purchasing departments at leading marketers is creating an impish desire to go straight to Google or Facebook to do such deals because it sounds cool and big and futuristic. Agencies will do well to learn how to maneuver this changing landscape and redefine what they bring to the table, including a strong voice where needed to educate both clients like Heineken and media owners such as Google.
Finally, I disagree with Gareth above. Agencies can have truckloads more data than one single media owner such as Google can ever have. Agencies can offer pools of data from across media owners, and even beyond that, across different channels (where Google doesn't even play). But what's needed is for media agencies or their larger network companies to invest in techsavvy people, people who understand large scale systems and databases and cube analytics. This is a tough sell to senior management when they don't know what a database hosting environment is, to begin with.
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